[Northern Ontario] Forestry in transition – Thunder Bay Chronicle-Journal Editorial (November 26, 2012)

The Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario.

RESOLUTE Forest Products has made two major announcements in Northwestern Ontario in recent days. The company is idling a kraft mill and paper machine at its pulp and paper plant in Fort Frances, due to what it calls challenging market conditions.

The Montreal-based forestry company said it is closing the mill indefinitely as the market for specialty printing papers is expected to remain tenuous. About 239 employees will be affected.

Within days, Resolute announced plans to build an industrial wood pellet plant in Thunder Bay that will turn residual material into a source of renewable energy. The company said construction of the $10-million plant is expected to begin shortly and should be completed in 2014. It will hire 24 new employees.

Herein lies the changing nature of forestry. One market is fading just as another emerges. But let us not assume paper is a thing of the past. And let us not count on burning yet more fossil fuels as the answer to our energy needs.

Fort Frances is complicated by plant limitations and the decision by its main kraft pulp customer in the U.S. to buy elsewhere at less cost. Here again the Canadian dollar’s high value hurts Canadian exporters.

But Resolute said it’s exploring alternative options for Fort Frances, including producing other products. So there is hope yet.

In Thunder Bay, the market for other products led to the decision to build a new mill to make wood pellets. It has already signed a 10-year agreement to supply Ontario Power Generation with 45,000 metric tons of pellets annually.

The key market is OPG’s Atikokan Generating Station which is being converted from coal to forest biomass — wood pellets.
It is estimated the plant will need twice the supply coming from Resolute as OPG strives to maintain a reliable power supply to feed especially the Northwest’s growing mining sector. That becomes doubly important with the Ontario Power Authority’s decision to stop conversion of the Thunder Bay power station from coal to natural gas as it considers other ways to power the region.

Stopping both plants from burning coal is good. Switching Atikokan to biomass still produces greenhouse gases, though not as many. That leaves the Thunder Bay plant’s future as an unknown. Will it be converted to biomass instead of gas? Either way, greenhouse gases are emitted but essential electricity is made.

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